The Jubilee Blog

African Catholic Bishops Urge G7 Action on Debt, Bank Reform and Aid to Navigate Africa Crises

Africa Faith Leaders Urge Passage of New York Taxpayers and International Debt Crises Protection Act (S4747, A2970)

African Catholic bishops, representing 23 countries, issued a statement to G7 leaders to take action on debt crises, development bank reform and greater aid for the continent hit by multiple crises. Finance ministers and central bank governors of the group meet this week, May 11th through 13th. Japan will host G7 ministers and presidents in Hiroshima on May 19th - 21st. 

The bishops raised Pope Francis’ call for effective and reliable processes to alleviate unpayable debts and advocated that private creditors participate in debt relief.

“The G7 include the major debt issuance jurisdictions that need to coordinate domestic legal reforms to deter [private] creditor litigation against countries renegotiating debts,” said the bishops. “Prompt passage of the New York Taxpayer and International Debt Crises Protection Act will do that for the large share of debt issued in that jurisdiction, and offers a simple and effective model other G7 countries can follow.”

New York State law governs more than 52% of contracts held by private creditors. Legislation pending in the state legislature and introduced by Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy would bring private creditors into international debt reduction agreements.

To prevent future debt crises, the faith leaders asked for greater use of debt contracts that increase risk-sharing between the borrowers and creditors, in the context of all types of lending.

African bishops commented on proposals that could expand multilateral development bank lending, currently under consideration by the G20. Since last year, shareholders led by the US and other G7 countries led a request for the World Bank to “evolve” through changes in its mission, operations and finances.

“[W]e approach with caution the intention to add new missions when the old ones – primarily poverty reduction and human development – remain so far from being fulfilled,” added the faith leaders. “Without an extremely bold injection of resources, such additions can only come at the expense of existing poverty reduction and development priorities in the places where they are most pressing.”

They also called for more African participation in the decisions on World Bank future.

The high-level religious leaders referred to the issuance of $650 in emergency liquidity currency – Special Drawing Rights – in 2021. More than $400 billion SDRs went to developed countries and only $33 billion to Africa. The IMF has two lending facilities that can receive SDR contributions to finance loans to developing countries.

“It is. . .  essential to rethink Special Drawing Rights (SDRs) as an instrument of finance, and rechannel a significant portion of those held by wealthy countries to Africa,” stated the bishops.

The African Development Bank put forward a proposal for advanced economies’ SDR contributions to fund lending in the region, which the G7 currently considers.

“Africa's religious leaders know poverty in Africa because they lead so many major social services across the continent to alleviate poverty,” said Eric LeCompte, Executive Director of Jubilee USA Network, which supports Africa's Catholic Bishops in their advocacy. "Africa's religious leaders are positioned to explain to the G7 the need to address Africa's multiple crises.”

Find the African Catholic Bishops' Statement to the G7 here.

New York Assembly and Senate Champions Vow to Pass Global Debt Relief Bill

Largest New York Labor and Religious Groups Support The New York Taxpayer and International Debt Crises Protection Act 

By Jubilee USA Network

Speaking at a press conference from the famed "million dollar staircase" in New York's State Capitol, State Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy vowed to pass debt relief legislation, the New York Taxpayer and International Debt Crises Protection Act (A.2970, S.4747).

“The global COVID-19 pandemic and climate disaster have all laid bare just how interconnected the global economy has become today,” said Fahy. “New York is the world’s global financial hub — positioning us well to enact basic changes that will ensure debt relief for developing nations through investments in sustainable growth, infrastructure and more.”

Fahy, the lead Assembly sponsor of the bill, asserted that the initiative will benefit taxpayers and consumers in New York and the US as well as protect the state’s status as the world’s leading financial center. Constituents from across the State of New York descended on Albany on May 2nd to meet with lawmakers to urge passage of the Fahy and Hoylman-Sigal legislation. 

“Our bill will help countries struggling to recover from challenges like climate change and COVID. At the same time, the bill will protect New York taxpayers and reduce the harmful impact of inflation,” said Hoylman-Sigal, the lead sponsor in the Senate of the The New York Taxpayer and International Debt Crises Protection Act.

Developing countries owe more than 60 percent of their debt to private firms. Since 52% of the world's private sector debt is governed by New York law, the New York Taxpayer and International Debt Crises Protection Act (A.2970, S.4747) ensures the private sector participates in relief agreements supported by the US Government.

“Most of the world's countries continue to struggle with the pandemic and food crises,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “When developing countries, our trading partners, are in crises we face higher prices for eggs, flour, fuel and coffee."

A large coalition of religious, development, labor and environmental organizations promotes the legislation. Supporters include major unions such as New York AFL-CIO; New York AFSCME and the New York State Public Employees Federation; churches such as the New York State Catholic Conference; the New York State Council of Churches, the United Church of Christ, the Methodist Church and the Presbyterian Church; development organizations such as Oxfam America; Bread for the World and the ONE Campaign; Puerto Rico's Speaker of the House and religious leaders on the island; and environmental groups such as Catholic Climate Covenant and the Rivers & Mountains GreenFaith Circle. 

"Major religious groups and unions support the legislation because it provides aid to people struggling with crises, protects our pensions and can help address inflation," noted LeCompte who serves on United Nations debt expert groups.

Last week, the United Nations Independent Expert on Foreign Debt and Human Rights, Attiya Waris, issued a letter to the New York legislature highlighting how the legislation will advance human rights. 

Read the New York Taxpayer and International Debt Crises Protection Act bill and bill memo here.

Read the talking points for the New York Taxpayer and International Debt Crises Protection Act here.

Read The New York AFL-CIO, the New York State Catholic Conference, the New York Council of Churches, New York AFSCME, Oxfam America, Bread for the World, Puerto Rico and other Memos/Letters of Support for the New York Taxpayer and International Debt Crises Protection Act here. 

Read the In-depth Frequently Asked Questions on the legislation here.

Read the media coverage on the legislation here.

Find Jubilee USA's press releases on the bill here.

Find all of the the New York Taxpayer and International Debt Crises Protection Act resources here.

IMF Forecasts Lowest Growth in Decades as World Leaders Descend on Washington for Meetings

Debt Roundtable Meetings Attempt to Break Impasse on Debt Relief From China and Private Sector

The International Monetary Fund forecasted the lowest global growth in decades as world leaders attend IMF, World Bank, G7 and G20 meetings. The IMF flagship World Economic Outlook report expects growth to fall to 2.8% this year. 

“The ongoing war and high inflation and interest rates are pushing countries into debt and food crises,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte has monitored IMF and World Bank policies since 2010. “In the US and around the world more people are facing hunger because of intertwined global crises.”

High debt ratios in low- and middle-income countries as interest rates rise across the world are a concern that the report highlights. The report suggests that debt restructurings will play an important role in reducing debt.

“In the IMF's key report issued this week, they noted the need for there to be processes for debt relief that can deal with multiple countries,” shared LeCompte. "Current debt relief processes are failing to cut debt and get countries the aid they need."

As part of pandemic and financial crisis response, the G20 created a process called the Common Framework to facilitate debt restructuring for more than 70 developing countries. On Wednesday, a group of stakeholders representing the private sector and lending and borrowing countries, met in a forum called the Sovereign Debt Roundtable.

"The Sovereign Debt Roundtable is an attempt to overcome some challenges regarding participation from China and the private sector in current debt relief initiatives," noted LeCompte. "Legislation is moving in New York State, the world's financial center, that ensures the private sector participates in debt relief."

The New York Taxpayer and International Debt Crises Protection Act (S.4747, A.2970) allows developing countries to receive debt relief from the private sector. The legislation sponsored by Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy ensures the private sector participates in global debt relief agreements and promote global financial stability.

On Tuesday, the IMF released the Global Financial Stability report and found that rising geopolitical tensions increase risks in the financial system through loss of capital, impacts on the banking sector and less opportunities to cushion external shocks.

“Based on IMF analysis, the shock of the Ukraine war is making other economic shocks worse,” added LeCompte. “The war in Ukraine means that the poorest countries have less capacity to face shocks and will suffer the most."

On Thursday, G20 Finance Ministers meet. On Saturday, the IMF and World Bank Spring Meetings conclude. 

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read more about the New York Taxpayer and International Debt Crises Protection Act here. 

Join the Jubilee USA Friday, April 14th, 2:00 PM Community Park Press Conference outside the IMF with leader from the Africa Catholic Bishops, Bishop Charles Kasonde, Rev. Charles Chilufya S.J., Latindadd's Patricia Miranda, Athena Peralta of the World Council of Churches, the AFL-CIO's Policy Director Candace Archer and Jubilee's Eric LeCompte. More info and registration here.

Read the full World Economic Outlook Report here.

Read the full Global Financial Stability Report here.

Find Jubilee USA's April 14th interfaith vigil and press conference details here.

Global Growth Remains Low Amidst Debt Concerns, War and Inflation, Says IMF Head

By Anjoulie Woodhead

The challenges to the global economy and slow economic growth will continue this year, said IMF Managing Director Kristalina Georgieva. Delivering her traditional “curtain raiser” speech before the opening of the IMF and World Bank Spring meetings, she anticipated a 3% growth this year, below 3.4% last year.

“The IMF is reporting bad news for wealthy and poor countries,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte monitored IMF policies for more than a decade. “The vulnerable are struggling with the pandemic, inflation and rising food prices.”

For the poorest countries, the IMF chief sees higher debt payments and lower demand for what they export. This could fuel further hunger and poverty increases.

Sixty percent of low-income countries and a quarter of emerging economies are at or near debt crises. Since February the IMF initiated, alongside the Indian Presidency of the G20 and the World Bank, a Global Sovereign Debt Roundtable to resolve disagreements that stall debt relief processes.

“While more countries face debt crises, we still don't have a fully functioning debt relief process,” noted LeCompte. "Developing countries need debt relief and access to more resources."

Georgieva called for donor countries to address funding shortfalls so the IMF maintains capacity to provide interest-free loans to the poorest members. 

Watch the curtain-raiser speech here.

Needs of Poorest, Vulnerable Countries in Focus at United Nations Doha Conference

By Anjoulie Woodhead

Presidents, Prime ministers and leaders of the UN's 46 Least Developed Countries and representatives from all countries meet in Doha to help poor countries respond to multiple crises and achieve development and climate objectives. 

On Sunday, United Nations Secretary General, António Guterres, opened the once-in-a-decade Fifth United Nations Conference on Least Developed Countries. He asserted that debt challenges must be tackled if these countries are going to meet the UN's Sustainable Development Goals.

“Too much debt may be the biggest issue facing most developing countries,” said Eric LeCompte, one of the high-level expert panelists invited to address the leaders. LeCompte heads the religious development group Jubilee USA Network. “The international community must quickly address the global debt crisis and get aid to these countries wrestling with a new food crisis due to the war in Ukraine.”

The conference ends on March 9th. 

View the United Nations' list of Least Developed Countries here.

See the agenda for Wednesday's "High-level Thematic Roundtable 7: Resource mobilization and strengthened global partnerships for sustainable development in Least Developed Countries," here.

Watch on UN TV, the "High-level Thematic Roundtable 7: Resource mobilization and strengthened global partnerships for sustainable development in Least Developed Countries," here.